EX-99 2 a52212100ex_99.htm EXHIBIT 99
Exhibit 99


CACI Reports Results for Its Fiscal 2020 Third Quarter

Revenue of $1.5 billion, +15.9% year-over-year

Net income of $80.6 million, +18.2% year-over-year

Robust cash flow from operations

Contract awards of $1.4 billion

Reiterates Fiscal 2020 Guidance

ARLINGTON, Va.--(BUSINESS WIRE)--April 29, 2020--CACI International Inc (NYSE: CACI), a leading provider of expertise and technology to government enterprise and mission customers, announced results today for its third fiscal quarter ended March 31, 2020.

CEO Commentary and Outlook

John Mengucci, CACI’s President and CEO, said, “As our nation navigates the COVID-19 pandemic, CACI is focused on taking all necessary actions to ensure the health and safety of our employees, to continue our unwavering commitment to our customers, to continue to operate the company in a fiscally responsible manner, and to support the communities in which we work and live.”

Mr. Mengucci continued, “Our third quarter financial results were strong with robust revenue growth, strong profitability, healthy cash flow, and high levels of contract awards. We are well-positioned in a large addressable market, serving stable government customers with enduring national security priorities under long-term contracts. We remain confident in delivering on our commitments of organic growth, margin expansion, and creating enduring shareholder value.”

COVID-19: Impact and Resiliency

We estimate the impact from COVID-19 in our third quarter was approximately $10 million of revenue, $6 million of operating income, and $4.5 million of net income. This was driven primarily by CACI employees and subcontractors unable to access facilities due to COVID-19 and who could not telework.

Despite challenges from COVID-19, CACI’s business remains operationally and financially resilient. CACI has a healthy balance sheet, holds appropriate debt levels at 2.8 times our trailing twelve-months EBITDA, and generates strong cash flow. In addition, CACI has access to significant liquidity of about $835 million through its credit facility with very manageable covenants.

Third Quarter Results

(in millions except earnings per share and DSO)

Q3, FY20

Q3, FY19

% Change

Revenue

$1,465.6

$1,265.0

15.9%

Operating income

$113.7

$94.9

19.8%

Net income

$80.6

$68.1

18.2%

Diluted earnings per share

$3.16

$2.69

17.6%

Net cash provided by operating activities excluding MARPA1

$124.7

$113.3

10.1%

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure2

$141.4

$118.0

19.9%

Days sales outstanding (DSO)3

57

66

 

(1)


Third quarter FY19 and third quarter FY20 net cash provided by operating activities exclude CACI’s Master Accounts Receivable Purchase Agreement (MARPA). For more details, see the Reconciliation of Net Cash Provided by Operating Activities to Net Cash Provided by Operating Activities Excluding MARPA on page 9 of this release.

(2)


See the Reconciliation of Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) on page 9 of this release.

(3)


The DSO calculations for third quarter FY19 and third quarter FY20 exclude the impact of the Company’s MARPA, which was 9 days and 8 days, respectively.

The year-over-year increase in Q3 FY20 net income was due to higher revenue and operating income, partially offset by higher interest expense and a higher effective tax rate. The increase in cash from operations, excluding MARPA, was driven by higher net income and lower DSO as a result of enhanced billing and collections processes.

Third Quarter Contract Awards

Contract awards in Q3 FY20 totaled $1.4 billion. Approximately 50% of contract award value is for new business to CACI. These awards exclude ceiling values of multi-award, indefinite delivery, indefinite quantity (IDIQ) contracts. Some notable awards during the quarter were:

  • A six-year, single-award task order, with a ceiling value of nearly $249 million, to provide mission expertise to U.S. Africa Command (AFRICOM) for operations, planning, and training support.
  • A five-year, single-award task order, awarded under the SeaPort-NxG contract vehicle, with a ceiling value of more than $83 million, by the U.S. Navy to provide expanded mission expertise, including engineering, technical, and planning expertise to the Portsmouth Naval Shipyard in Kittery, Maine.
  • A prime position on a multiple-award, indefinite delivery/indefinite quantity contract, with a ceiling value of $249 million, by the Naval Sea Systems Command, to provide mission expertise related to analyses and initiatives that improve effectiveness, efficiency, and affordability in ship design, manufacturing, and lifecycle support.
  • A five-year, six-month, if all options are exercised, single award, indefinite-delivery/indefinite-quantity contract, with a ceiling value of more than $199 million, to provide the U.S. Navy with mission expertise to support special operations communications systems, satellite communications and network support services.
  • In March 2020, CACI’s team assisted the Army in completing the first deployment of the Integrated Personnel and Pay System-Army (IPPS-A) application to the Army National Guard, bringing the total number of users to more than 340,000. CACI has also begun to build the next release of the IPPS-A application for the Reserve and Active Duty Soldiers, which will increase the number of users to approximately 1,200,000.

Total backlog as of March 31, 2020 was $19.9 billion compared with $14.9 billion a year ago, an increase of 34%. Funded backlog as of March 31, 2020 was $3.0 billion compared with $2.9 billion a year ago, an increase of 3%.

Additional Highlights

  • CACI appointed Susan M. "Sue" Gordon to CACI's Board of Directors. Ms. Gordon has served in senior leadership positions across numerous intelligence organizations. She brings more than 30 years of leadership across a broad spectrum of complex issues, most notably in the development of innovative technology and transformative outcomes for the Intelligence Community.
  • CACI was honored by The Global M&A Network with two awards for the successful acquisition of LGS Innovations: the M&A Atlas award for Corporate Deal of the Year in the Large Market category for its completion, and the Corporate Growth Dealmaker Award for CACI Executive Vice President and Chief Development Officer Michael Lewis for his role in its execution.
  • Fortune magazine recognized CACI as one of the World's Most Admired Companies for 2020, CACI's ninth time appearing on the list. CACI ranked seventh among Information Technology Services companies worldwide.
  • CACI named Daniel Walsh, who most recently served as White House Deputy Chief of Staff, a Corporate Strategic Advisor and Senior Vice President to support the development of CACI's national defense and homeland security business strategy. Mr. Walsh will help to enhance CACI's position in the national security market and help to expand key client relationships.

Reiterating FY20 Guidance

CACI’s business continues to perform well despite the COVID-19 pandemic. While there are some impacts and uncertainties as a result of COVID-19, we believe these effects are reflected in our previously-provided guidance ranges. The table below summarizes our FY20 guidance and represents our views as of April 29, 2020.

 

 

(in millions except earnings per share)

 

Current Fiscal Year
2020 Guidance

 

Previous Fiscal Year
2020 Guidance

Revenue

$5,600 - $5,800

$5,600 - $5,800

Net income

$305 - $325

$305 - $325

Diluted earnings per share

$11.91 - $12.70

$11.91 - $12.70

Diluted weighted average shares

25.6

25.6

Net cash provided by operating activities

at least $430

at least $430

Conference Call Information

We have scheduled a conference call for 8:30 AM Eastern Time Thursday, April 30, 2020 during which members of our senior management will be making a brief presentation focusing on third quarter results and operating trends followed by a question-and-answer session. You can listen to the webcast and view the accompanying exhibits on CACI’s investor relations website at http://investor.caci.com/news/#upcomingevent at the scheduled time. A replay of the call will also be available on CACI’s investor relations website at http://investor.caci.com/.

About CACI

CACI’s 23,000 talented employees are vigilant in providing the unique expertise and distinctive technology that address our customers’ greatest enterprise and mission challenges. Our culture of good character, innovation, and excellence drives our success and earns us recognition as a Fortune World’s Most Admired Company. As a member of the Fortune 1000 Largest Companies, the Russell 1000 Index, and the S&P MidCap 400 Index, we consistently deliver strong shareholder value. Visit us at www.caci.com.

There are statements made herein that do not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to risk factors that could cause actual results to be materially different from anticipated results. These risk factors include, but are not limited to, the following: our reliance on U.S. government contracts, which includes general risk around the government contract procurement process (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; significant delays or reductions in appropriations for our programs and broader changes in U.S. government funding and spending patterns; legislation that amends or changes discretionary spending levels or budget priorities, such as for homeland security or to address global pandemics like COVID-19; legal, regulatory, and political change from successive presidential administrations that could result in economic uncertainty; changes in U.S. federal agencies, current agreements with other nations, foreign events, or any other events which may affect the global economy, including the impact of global pandemics like COVID-19; the results of government audits and reviews conducted by the Defense Contract Audit Agency, the Defense Contract Management Agency, or other governmental entities with cognizant oversight; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); failure to achieve contract awards in connection with re-competes for present business and/or competition for new business; regional and national economic conditions in the United States and globally, including but not limited to: terrorist activities or war, changes in interest rates, currency fluctuations, significant fluctuations in the equity markets, and market speculation regarding our continued independence; our ability to meet contractual performance obligations, including technologically complex obligations dependent on factors not wholly within our control; limited access to certain facilities required for us to perform our work, including during a global pandemic like COVID-19; changes in tax law, the interpretation of associated rules and regulations, or any other events impacting our effective tax rate; changes in technology; the potential impact of the announcement or consummation of a proposed transaction and our ability to successfully integrate the operations of our recent and any future acquisitions; our ability to achieve the objectives of near term or long-term business plans; the effects of health epidemics, pandemics and similar outbreaks may have material adverse effects on our business, financial position, results of operations and/or cash flows; and other risks described in our Securities and Exchange Commission filings.

CACI-Earnings Release

CACI International Inc










Condensed Consolidated Statements of Operations (Unaudited)







(Amounts in thousands, except per share amounts)





















 


Quarter Ended

 

 

 

Nine Months Ended

 

 



3/31/2020

 

3/31/2019

 

% Change

 

3/31/2020

 

3/31/2019

 

% Change

Revenue

$

1,465,600


$

1,264,958


15.9%


$

4,224,461


$

3,612,463


16.9%

Costs of revenue











Direct costs

 

953,630


 

824,024


15.7%


 

2,737,378


 

2,397,633


14.2%


Indirect costs and selling expenses

 

371,135


 

324,828


14.3%


 

1,081,175


 

859,262


25.8%


Depreciation and amortization

 

27,159


 

21,198


28.1%


 

81,888


 

58,797


39.3%

Total costs of revenue

 

1,351,924


 

1,170,050


15.5%


 

3,900,441


 

3,315,692


17.6%

Operating income

 

113,676


 

94,908


19.8%


 

324,020


 

296,771


9.2%

Interest expense and other, net

 

14,087


 

13,466


4.6%


 

45,612


 

31,773


43.6%

Income before income taxes

 

99,589


 

81,442


22.3%


 

278,408


 

264,998


5.1%

Income taxes

 

19,012


 

13,297


43.0%


 

50,659


 

49,424


2.5%

Net income

$

80,577


$

68,145


18.2%


$

227,749


$

215,574


5.6%













 
Basic earnings per share

$

3.21


$

2.74


17.2%


$

9.11


$

8.69


4.8%

Diluted earnings per share

$

3.16


$

2.69


17.6%


$

8.94


$

8.50


5.2%













 
Weighted average shares used in per share computations:








Basic

 

25,078


 

24,866




 

25,012


 

24,819




Diluted

 

25,478


 

25,348




 

25,481


 

25,369















 

Statement of Operations Data (Unaudited)

 

 

Quarter Ended

 

 

 

Nine Months Ended

 

 

 

 

3/31/2020

 

3/31/2019

 

 

 

3/31/2020

 

3/31/2019

 

 







% Change






% Change

Operating income margin

 

7.8%


 

7.5%




 

7.7%


 

8.2%



Tax rate

 

19.1%


 

16.3%




 

18.2%


 

18.7%



Net income margin

 

5.5%


 

5.4%




 

5.4%


 

6.0%















 
Adjusted EBITDA*

$

141,432


$

117,966


19.9%


$

410,645


$

357,983


14.7%

Adjusted EBITDA Margin

 

9.7%


 

9.3%




 

9.7%


 

9.9%















 

* See Reconciliation of Net Income to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization on page 9
Selected Financial Data (Continued)




 
CACI International Inc


Condensed Consolidated Balance Sheets (Unaudited)


(Amounts in thousands)






 


3/31/2020


6/30/2019

ASSETS:


Current assets



Cash and cash equivalents

$

77,156


$

72,028


Accounts receivable, net

 

839,135


 

869,840


Prepaid expenses and other current assets

 

158,075


 

89,652

Total current assets

 

1,074,366


 

1,031,520





 
Goodwill and intangible assets, net

 

3,829,084


 

3,772,194

Property and equipment, net

 

169,378


 

149,676

Operating lease right-of-use assets

 

339,292


 

0

Other long-term assets

 

134,355


 

133,453

Total assets

$

5,546,475


$

5,086,843





 
LIABILITIES AND SHAREHOLDERS' EQUITY:


Current liabilities



Current portion of long-term debt

$

46,920


$

46,920


Accounts payable

 

174,641


 

118,917


Accrued compensation and benefits

 

287,570


 

290,274


Other accrued expenses and current liabilities

 

270,034


 

235,611

Total current liabilities

 

779,165


 

691,722





 
Long-term debt, net of current portion

 

1,464,664


 

1,618,093

Other long-term liabilities

 

739,016


 

405,562

Total liabilities

 

2,982,845


 

2,715,377





 
Shareholders' equity

 

2,563,630


 

2,371,466

Total liabilities and shareholders' equity

$

5,546,475


$

5,086,843





 
Selected Financial Data (Continued)




 
CACI International Inc


Condensed Consolidated Statements of Cash Flows (Unaudited)


(Amounts in thousands)






 


Nine Months Ended



3/31/2020


3/31/2019

CASH FLOWS FROM OPERATING ACTIVITIES:


Net income

$

227,749

 


$

215,574

 

Reconciliation of net income to net cash provided by operating activities:




 

Depreciation and amortization

 

81,888

 


 

58,797

 


Non-cash lease expense

 

54,493

 


 

-

 


Amortization of deferred financing costs

 

1,762

 


 

1,796

 


Stock-based compensation expense

 

22,204

 


 

18,351

 


Deferred income taxes

 

39,527

 


 

(1,193

)

Changes in operating assets and liabilities, net of effect of business acquisitions:

 

Accounts receivable, net

 

36,433

 


 

85,995

 


Prepaid expenses and other assets

 

(35,461

)


 

(13,284

)


Accounts payable and other accrued expenses

 

27,638

 


 

101,473

 


Accrued compensation and benefits

 

(4,522

)


 

(18,536

)


Income taxes payable and receivable

 

(42,383

)


 

(1,945

)


Operating lease liabilities

 

(56,240

)


 

-

 


Long-term liabilities

 

4,737

 


 

5,813

 

Net cash provided by operating activities

 

357,825

 


 

452,841

 





 
CASH FLOWS FROM INVESTING ACTIVITIES:


Capital expenditures

 

(54,331

)


 

(29,545

)

Cash paid for business acquisitions, net of cash acquired

 

(102,437

)


 

(1,071,023

)

Other

 

-

 


 

1,875

 

Net cash used in investing activities

 

(156,768

)


 

(1,098,693

)





 
CASH FLOWS FROM FINANCING ACTIVITIES:


Net borrowings (payments) under credit facilities

 

(155,190

)


 

693,424

 

Payment of contingent consideration

 

(8,700

)


 

(616

)

Proceeds from employee stock purchase plans

 

5,463

 


 

4,265

 

Repurchases of common stock

 

(5,584

)


 

(4,310

)

Payment of taxes for equity transactions

 

(30,616

)


 

(18,837

)

Net cash provided by (used in) financing activities

 

(194,627

)


 

673,926

 

Effect of exchange rate changes on cash and cash equivalents

 

(1,302

)


 

(462

)

Net increase in cash and cash equivalents

 

5,128

 


 

27,612

 

Cash and cash equivalents, beginning of period

 

72,028

 


 

66,194

 

Cash and cash equivalents, end of period

$

77,156

 


$

93,806

 





 
Selected Financial Data (Continued)






 
Revenue by Customer Type (Unaudited)

Quarter Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Department of Defense

$

1,037,242

70.8%

$

887,030

70.1%

$

150,212

16.9%

Federal Civilian Agencies

 

361,320

24.7%

 

318,374

25.2%

 

42,946

13.5%

Commercial and other

 

67,038

4.6%

 

59,554

4.7%

 

7,484

12.6%

Total

$

1,465,600

100.0%

$

1,264,958

100.0%

$

200,642

15.9%







 

Nine Months Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Department of Defense

$

2,965,263

70.2%

$

2,540,093

70.3%

$

425,170

16.7%

Federal Civilian Agencies

 

1,067,342

25.3%

 

898,491

24.9%

 

168,851

18.8%

Commercial and other

 

191,856

4.5%

 

173,879

4.8%

 

17,977

10.3%

Total

$

4,224,461

100.0%

$

3,612,463

100.0%

$

611,998

16.9%







 
Revenue by Contract Type (Unaudited)

Quarter Ended

(dollars in thousands) 3/31/2020 3/31/2019 $ Change % Change
Cost reimbursable

$

852,700

58.2%

$

704,627

55.7%

$

148,073

21.0%

Fixed price

 

405,736

27.7%

 

374,006

29.6%

 

31,730

8.5%

Time and materials

 

207,164

14.1%

 

186,325

14.7%

 

20,839

11.2%

Total

$

1,465,600

100.0%

$

1,264,958

100.0%

$

200,642

15.9%







 

Nine Months Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Cost reimbursable

$

2,418,891

57.3%

$

2,003,204

55.5%

$

415,687

20.8%

Fixed price

 

1,212,579

28.7%

 

1,055,384

29.2%

 

157,195

14.9%

Time and materials

 

592,991

14.0%

 

553,875

15.3%

 

39,116

7.1%

Total

$

4,224,461

100.0%

$

3,612,463

100.0%

$

611,998

16.9%







 

Revenue Generated as a Prime versus Subcontractor (Unaudited)


Quarter Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Prime

$

1,344,315

91.7%

$

1,153,599

91.2%

$

190,716

16.5%

Subcontractor

 

121,285

8.3%

 

111,359

8.8%

 

9,926

8.9%

Total

$

1,465,600

100.0%

$

1,264,958

100.0%

$

200,642

15.9%







 

Nine Months Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Prime

$

3,849,561

91.1%

$

3,335,427

92.3%

$

514,134

15.4%

Subcontractor

 

374,900

8.9%

 

277,036

7.7%

 

97,864

35.3%

Total

$

4,224,461

100.0%

$

3,612,463

100.0%

$

611,998

16.9%

Selected Financial Data (Continued)




 
Contract Awards Received (Unaudited)

Quarter Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Contract Awards

$

1,448,035

$

2,665,317

$

(1,217,282

)

-45.7

%





 

Nine Months Ended



(dollars in thousands)

3/31/2020

3/31/2019

$ Change

% Change

Contract Awards

$

8,176,742

$

6,512,352

$

1,664,390

 

25.6

%

Reconciliation of Net Cash Provided by Operating Activities to
Net Cash Provided by Operating Activities Excluding MARPA
(Unaudited)

The Company defines net cash provided by operating activities excluding CACI’s Master Accounts Receivable Purchase Agreement (MARPA) as net cash provided by operating activities calculated in accordance with GAAP, adjusted to exclude net cash received from CACI’s MARPA for the sale of certain designated eligible U.S. government receivables. Under the MARPA, the Company can sell eligible receivables, including certain billed and unbilled receivables up to a maximum amount of $200.0 million. The Company provides net cash provided by operating activities excluding MARPA to allow investors to more easily compare current period results to prior period results and to results of our peers. This non-GAAP measure should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.





 


Quarter

Ended


Quarter

Ended

(dollars in thousands)

3/31/2020


3/31/2019

Net cash provided by operating activities

$

120,800


$

313,301

 


Cash used (provided) by MARPA

 

3,938


 

(200,000

)

Net cash provided by operating activities excluding MARPA

$

124,738


$

113,301

 

Reconciliation of Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(Unaudited)

The Company views Adjusted EBITDA and Adjusted EBITDA margin, both of which are defined as non-GAAP measures, as important indicators of performance, consistent with the manner in which management measures and forecasts the Company’s performance. Adjusted EBITDA is a commonly used non-GAAP measure when comparing our results with those of other companies. We define Adjusted EBITDA as GAAP net income plus net interest expense, income taxes, depreciation and amortization expense, including depreciation within direct costs, and earnout adjustments. We consider Adjusted EBITDA to be a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of non-cash items such as depreciation of tangible assets, amortization of intangible assets primarily recognized in business combinations, as well as the effect of earnout gains and losses, which we do not believe are indicative of our core operating performance. Adjusted EBITDA margin is adjusted EBITDA divided by revenue. These non-GAAP measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.



Quarter Ended


Nine Months Ended

(dollars in thousands)

3/31/2020

3/31/2019

% Change


3/31/2020

3/31/2019

% Change

Net income

$

80,577

$

68,145

18.2%


$

227,749

$

215,574

5.6%

Plus:







Income taxes

 

19,012

 

13,297

43.0%


 

50,659

 

49,424

2.5%


Interest income and expense, net

 

14,087

 

13,466

4.6%


 

45,612

 

31,773

43.6%


Depreciation and amortization expense, including depreciation within direct costs

 

27,656

 

21,958

25.9%


 

83,625

 

60,912

37.3%


Earnout adjustments

 

100

 

1,100

-90.9%


 

3,000

 

300

900.0%

Adjusted EBITDA

$

141,432

$

117,966

19.9%


$

410,645

$

357,983

14.7%









 


Quarter Ended


Nine Months Ended

(dollars in thousands)

3/31/2020

3/31/2019

% Change


3/31/2020

3/31/2019

% Change

Revenue, as reported

$

1,465,600

$

1,264,958

15.9%


$

4,224,461

$

3,612,463

16.9%

Adjusted EBITDA

 

141,432

 

117,966

19.9%


 

410,645

 

357,983

14.7%

Adjusted EBITDA margin

 

9.7%

 

9.3%



 

9.7%

 

9.9%


 

Contacts

Corporate Communications and Media:
Jody Brown, Executive Vice President, Public Relations
(703) 841-7801, jbrown@caci.com

Investor Relations:
Dan Leckburg, Senior Vice President, Investor Relations
(703) 841-7666, dleckburg@caci.com